Google Pours Millions Into New Tech Gold Rush: Housecleaning

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Google Pours Millions Into New Tech Gold Rush: Housecleaning

Homejoy co-founders Adora and Aaron Cheung.

Photo: Homejoy

"Good help is hard to find." Such a lament might be expected from the Downton Abbey set. But it's a sentiment that Google and other Silicon Valley types are also getting behind, to the tune of tens of millions of dollars.

Today, housecleaning startup Homejoy announced $38 million in new financing from Google Ventures, PayPal co-founder Max Levchin, and multiple venture capitalists. The investment brings the four-year-old company's total funding to about $40 million, as it seeks to apply an Uber-style business model to domestic work. Much like Uber's mobile app shows you available taxis and limos in your area, Homejoy offers an app that brings a new kind of visibility to the market for housecleaners.

Co-founder CEO Adora Cheung says she and her brother, both engineers, spent years hacking around on startup ideas, but none clicked. In the summer of 2012, fed up with the dirty apartment that doubled as their office, they sought out a housecleaner. They found that cleaning agencies were too expensive, she says, and they didn't trust Craigslist. "You don't know who the heck is going to show up at your place," she says.

The siblings had run into the proverbial "pain point" that entrepreneurs seek out, so they can solve it with a new business. In July 2012, Homejoy was born. Cheung and her brother, Aaron, were the first cleaners. Less than a year-and-a-half later, the company is in 31 North American cities, and more than 1,000 cleaners offer their services on the platform.

The premise of Homejoy is fairly simple. Go to the website or download the app, create an account, and pick a time you want your house cleaned. The rate is $20 per hour plus a $5 supply fee. A key selling point is that the housecleaners themselves are insured and vetted by Homejoy. Like Uber's drivers, however, they're not technically employed by the company. Instead, they work as freelancers who set their own hours and receive assignments based on availability.

For investors, Homejoy's appeal would seem to rest on its potential to create efficiency through transparency. (Google Ventures and Levchin didn't immediately return requests for comment.) Homejoy, Cheung says, provides a highly visible way for the vast workforce of independent cleaners to make themselves known and demonstrate their competence. "We're essentially organizing all the independent cleaners onto our platform," Cheung says.

Unlike online marketplaces that sell physical goods, brokering other people's labor puts startups in more politically fraught territory. Such services are easily mocked as perks for tech haves at the expense of exploited have-nots. Cheung says Homejoy branched out beyond its roots in the San Francisco Bay area so quickly to show that the demand from both customers and cleaners existed well beyond the Silicon Valley early-adopter scene. Much of the new millions in the company's bank account will go toward expanding not just into more cities around the globe but also beyond cities and into the suburbs, where she says demand is also strong.

Cheung says she has received flack for the $20 per hour rate promised by Homejoy. But she says the $12 to $15 per hour the cleaners receive out of that total is a rate reached in consultation with cleaners themselves, who also keep any tips they receive (Cheung contends that with tips cleaners often end up making closer to $20 per hour themselves).

As for whether Google and fellow investors will make money, it's easy to see both sides.

On the one hand, the proliferation of marketplaces inspired by the success of Uber and Airbnb ("Airbnb for dogs," "Uber for open houses") recalls the first dotcom bubble, when every consumer product category had its own massively funded e-commerce site (Pets.com, eToys). In that light, big investments start to feel a little frothy.

Unlike those doomed Web 1.0 ventures, however, which floundered in part on heavily centralized operations and inventory, today's mobile-powered marketplaces are lightweight and flexible by comparison, especially when what's being offered are services, not goods. To move into a new city, Cheung says, Homejoy needs to do little more than fire up a new virtual server and get a few people on the ground to get cleaners and customers on board.

With such relatively low startup costs, the huge success of Uber has shown that using technology to improve an everyday transaction, even just a little, can mean the opportunity to make a whole lot of money.